We all know that compounding is the world's 8th wonder... and the more number of years you save and invest the faster ( geometric progression ) you are on your way to financial freedom.
Being financially free can significantly change your career and your choices in later life.
As a new professional, i remember back in my days , i was staying away from home. I had a large chunk of costs due to paying rent for home , daily food etc. These of course crept into my savings and i really did not have an investment plan apart from keeping my money in the savings bank account or my dad forcing me to put some money into my ppf account.
Later on in life , after my mba i was lucky enough to be back home and stay at home while working. It saved me a bunch load of money apart from all of the pampering i got .
In India we have the opportunity to really without any hitch stay with our parents even after starting to work - unlike the west where this seems to be a taboo.
This lack of expenses should be considered as a major tailwind towards our financial freedom if we play it right and not spend away the savings because the bank balance seems nice.
Here are a few tips for parents and children to really think through and execute.
1. Be clear on how much saving the child has by staying at home. Expenses saved can be in so many areas... house rent, food, using the car and not buying a new one. Depending on the city this could be anywhere between 25 to 30 thousand Rs a month!
2. Have a pact with the child to force/ influence them to invest in the right financial products.
3. Make them aware how much this can support them and you as they go ahead in life.
With what savings i was able to make , i actually was able to put down the initial deposit for my house vs asking my dad for money.
All thanks to my parents for giving me a head start.. helping me get a tailwind!
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